CITIC Securities: The risks of cross-strait navigation are difficult to completely resolve.

CITIC Securities Research Report believes that the U.S.-Israel-Iran conflict has been ongoing for over five months. Regarding the recently discussed potential Iran-Oman maritime agreement, we believe that this agreement cannot completely resolve the navigational risks in the Strait. The Middle East situation may remain stuck in a cycle between Trumps TACO-style retreat and angry escalation. The reasons for this are twofold: first, the essence of the agreement is a tool for Iran to pressure the U.S., but its hardline stance directly threatens Trump's political legacy, making progress in negotiations difficult for both sides. Second, there are still structural contradictions surrounding the control of the Strait, making it challenging to establish a long-term stable management system. Overall, the signals that are truly meaningful to observe moving forward are whether the U.S. officially initiates sanctions waivers, asset freezes, and adjustments to maritime blockades. Looking ahead, in the medium to short term, even if all parties reach an arrangement for managing the Strait and lift the blockade, the shipping volume may not quickly and fully return to pre-war levels. In a limited navigation scenario, global inflation pressures still exist, but extreme risks are manageable. In the long term, the competition surrounding the Strait of Hormuz shows that the U.S.s ability and willingness to maintain global order is accelerating its decline, which will drive the accelerated restructuring of the geopolitical landscape in the Middle East and global supply chains.